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Re: Withdrawing Backdoor Conversions from Roth IRA

You might want to review the Cream In The Coffee link above: (added bold for clarity) " Ideally we’d like to separate the cream from the coffee, so that the pre-tax dollars can go to a traditional IRA (a tax-free rollover) and the after-tax dollars can go to a Roth IRA (a tax-free conversion). ...
by kaneohe
Thu Jan 29, 2015 9:04 am
 
Forum: Investing - Theory, News & General
Topic: Withdrawing Backdoor Conversions from Roth IRA
Replies: 33
Views: 2264

Re: Income on credit card application for high assets/low in

How about your actual cash flow/spending? That would ignore the "paper" loss factor.
by kaneohe
Thu Jan 29, 2015 8:42 am
 
Forum: Personal Finance (Not Investing)
Topic: Income on credit card application for high assets/low income
Replies: 21
Views: 669

Re: HSA... any receipt savers?

"There are better ways to invest for future living expenses than a HSA 'Disagree. HSA worst case is better than all other tax deductible retirement accounts. ' worst case........ < 59.5 y.o...................HSA penalized 20%; TIRA/401K penalized 10% Actually you can't access your HSA, penalty...
by kaneohe
Wed Jan 28, 2015 9:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: HSA... any receipt savers?
Replies: 175
Views: 7515

Re: HSA... any receipt savers?

"There are better ways to invest for future living expenses than a HSA

'Disagree. HSA worst case is better than all other tax deductible retirement accounts. '

worst case........ < 59.5 y.o...................HSA penalized 20%; TIRA/401K penalized 10%
by kaneohe
Wed Jan 28, 2015 7:33 pm
 
Forum: Investing - Help with Personal Investments
Topic: HSA... any receipt savers?
Replies: 175
Views: 7515

Re: Age limit on IRA deduction

So the key here is the 5 year rule. You can pull money out of a Roth IRA completely tax-free if you're over age 59.5 and it's been at least 5 years since your first Roth contribution. If they're just starting their first Roth accounts now, then they can't pull the money out for the next 5 years wit...
by kaneohe
Wed Jan 28, 2015 6:34 pm
 
Forum: Personal Finance (Not Investing)
Topic: Age limit on IRA deduction
Replies: 19
Views: 828

Re: Invest RMDs into Roth IRA

What you cannot do is CONVERT an RMD to a Roth..........If eligible, you can make a contribution to a Roth and the funds could come from an RMD....as others have mentioned, money is money. I'm thinking with an inherited TIRA, you can't convert anything to a Roth, even if a distribution is not part o...
by kaneohe
Wed Jan 28, 2015 5:54 pm
 
Forum: Investing - Help with Personal Investments
Topic: Invest RMDs into Roth IRA
Replies: 8
Views: 519

Re: Moving HSAs without a HDHP

Probably poorly worded instruction on the form that didn't take into account your ability to move the HSA around even w/o
HDHP. I would call and ask for an answer on the spot. Call someone else if they don't reply. Many credit unions have these.
by kaneohe
Wed Jan 28, 2015 1:28 pm
 
Forum: Investing - Theory, News & General
Topic: Moving HSAs without a HDHP
Replies: 1
Views: 197

Re: IRA to Roth IRA - Taxed on all or contributions only?

........................................ After 5 years the money in the Roth could be withdrawn tax free. ..................... Jeff The conversion funds can be withdrawn tax/penalty free. The earnings would be taxed/penalized if under 59.5 y.o.. This is assuming this is the only Roth. If there are...
by kaneohe
Wed Jan 28, 2015 11:08 am
 
Forum: Investing - Help with Personal Investments
Topic: IRA to Roth IRA - Taxed on all or contributions only?
Replies: 5
Views: 295

Re: Donating property & taxes - do I need form 8283?

http://www.irs.gov/pub/irs-pdf/f8283.pdf check out the words just below the title at top of page

also from the instructions for this form:
Who Must File
You must file Form 8283 if the amount of your deduction
for all noncash gifts is more than $500
by kaneohe
Tue Jan 27, 2015 9:24 pm
 
Forum: Personal Finance (Not Investing)
Topic: Donating property & taxes - do I need form 8283?
Replies: 2
Views: 197

Re: Beneficiary IRA RMD calculations

you are correct.....use the -1 method http://www.irs.gov/Retirement-Plans/Required-Minimum-Distributions-for-IRA-Beneficiaries You know, I looked at that publication a dozen times and missed where it answered my question. Who knew IRS publications could be so useful? :wink: Thanks for answering my ...
by kaneohe
Tue Jan 27, 2015 3:31 pm
 
Forum: Investing - Help with Personal Investments
Topic: Beneficiary IRA RMD calculations
Replies: 5
Views: 238

Re: Long term cap gains tax rate for 15% bracket

OP may find the stacked bar chart by tfb (see 12/11/2011) post useful/interesting. The thread is about QDIV but they are taxed similarly to LTCG:
http://www.bogleheads.org/forum/viewtopic.php?f=10&t=86849
by kaneohe
Tue Jan 27, 2015 3:06 pm
 
Forum: Investing - Help with Personal Investments
Topic: Long term cap gains tax rate for 15% bracket
Replies: 17
Views: 1716

Re: Long term cap gains tax rate for 15% bracket

.................. But the IRS is talking about the tax bracket you would be in if you had no cap gains when they say that at the 15% tax bracket you pay no cap gains taxes. ............................. not exactly..........I think they are saying the tax bracket you would be in if the cap gains w...
by kaneohe
Tue Jan 27, 2015 1:36 pm
 
Forum: Investing - Help with Personal Investments
Topic: Long term cap gains tax rate for 15% bracket
Replies: 17
Views: 1716

Re: Moving up a tax bracket - when to avoid, when to give up

Leif wrote:
I would use traditional IRA up to the point of the 25% bracket. After that place the rest in a Roth. .


Isn't this the opposite of the conventional thinking?
by kaneohe
Tue Jan 27, 2015 10:48 am
 
Forum: Personal Finance (Not Investing)
Topic: Moving up a tax bracket - when to avoid, when to give up
Replies: 26
Views: 2521

Re: Estimated Taxes for Roth Conversion

I am planning on converting my wife's traditional IRA to a Roth IRA so I can begin contributing to it, ... You can contribute to a Roth for your wife, even if she has a traditional IRA. From the description, it is a fairly safe bet that the OP is well over the Roth income limits for direct contribu...
by kaneohe
Tue Jan 27, 2015 9:34 am
 
Forum: Investing - Help with Personal Investments
Topic: Estimated Taxes for Roth Conversion
Replies: 7
Views: 933

Re: Understanding rollover IRA

Can you roll your rollover back to your current retirement plan at work?
by kaneohe
Mon Jan 26, 2015 3:14 pm
 
Forum: Investing - Help with Personal Investments
Topic: Understanding rollover IRA
Replies: 9
Views: 436

Re: Estimated Taxes for Roth Conversion

Sounds right to me.....of course w/ 90% of current yr safe harbor , there is alway some uncertainty whereas w/ 100% (prob. 110% for you) of previous yr safe harbor, there is none..........but you might not want to pay that 10% (or more) extra if you are confident in your other safe harbor.
by kaneohe
Mon Jan 26, 2015 11:57 am
 
Forum: Investing - Help with Personal Investments
Topic: Estimated Taxes for Roth Conversion
Replies: 7
Views: 933

Re: Withdrawing Backdoor Conversions from Roth IRA

It was a conversion in 2010 that was taxed in 2011 and 2012 (due to the 2010 conversion allowing the one time split taxes). penalty 5 yrs for withholding pertinent details :happy (forgot about that split yr thing) We'll have to let AlanS. bail us out here.........if I had to guess, That's still a 2...
by kaneohe
Sun Jan 25, 2015 11:25 pm
 
Forum: Investing - Theory, News & General
Topic: Withdrawing Backdoor Conversions from Roth IRA
Replies: 33
Views: 2264

Re: Withdrawing Backdoor Conversions from Roth IRA

"Sound about right?" I've never done this myself but everything I reads suggests not overestimating how fast those last 2 steps can take. You might want to consider moving those timelines earlier so you don't get a heart attack waiting for things to happen.
by kaneohe
Sun Jan 25, 2015 10:06 pm
 
Forum: Investing - Theory, News & General
Topic: Withdrawing Backdoor Conversions from Roth IRA
Replies: 33
Views: 2264

Re: Roth to Traditional and then backdoor to Roth

That's a bit surprising......if you were and are truly entering non-deductible TIRAs in both cases, there should have been no net effect.
Are you showing the right amount of basis on the 8606? and what's the taxable IRA amount on line 15b?
by kaneohe
Sun Jan 25, 2015 9:54 pm
 
Forum: Personal Finance (Not Investing)
Topic: Roth to Traditional and then backdoor to Roth
Replies: 9
Views: 799

Re: Long term cap gains tax rate for 15% bracket

The regular tax rate would be be 10% or 15% for taxable income up to the line separating the 15% and 25% brackets. Your capital gains rate( if your taxable income is lower than that line) is 0%. Your regular tax rate for ordinary income is up to 15%. The different rates are for different kinds of i...
by kaneohe
Sun Jan 25, 2015 8:38 pm
 
Forum: Investing - Help with Personal Investments
Topic: Long term cap gains tax rate for 15% bracket
Replies: 17
Views: 1716

Re: MediCare and ? What are your out of pocket costs please.

So I gather the Medicare and the supplemental insurance premiums are manageable, but out of pocket can really escalate with poorer health and the need for more meds, MD appts and services? It's the unknown surprises I want to be prepared for, at least financially! If you can't sleep because of this...
by kaneohe
Sun Jan 25, 2015 7:18 pm
 
Forum: Personal Finance (Not Investing)
Topic: MediCare and ? What are your out of pocket costs please.
Replies: 16
Views: 1509

Re: Some RMD Questions

bertilak wrote:Yup, I think we are all on the same page, with me the last to join.


doubt you'll be the last :happy
by kaneohe
Sun Jan 25, 2015 6:09 pm
 
Forum: Investing - Help with Personal Investments
Topic: Some RMD Questions
Replies: 28
Views: 1500

Re: Roth to Traditional and then backdoor to Roth

We must be doing something wrong. We tried working through the Forms 8606 online through TurboTax, but we get an error message telling us that we made excess contributions to the TIRA accounts and will owe a 6% penalty. Any ideas on what we might be doing wrong? Thanks, ~Backdoor Confusion perhaps ...
by kaneohe
Sun Jan 25, 2015 6:03 pm
 
Forum: Personal Finance (Not Investing)
Topic: Roth to Traditional and then backdoor to Roth
Replies: 9
Views: 799

Re: Some RMD Questions

Born 11/23/1945. Questions... [list=1] [*]I MUST take RMDs starting 2017, right? That is the year AFTER I turn 70.5. (70 in late 2015 so 70.5 in 2016.) [*]Is it better to start in 2016 so as not to "double dip" in 2017, pushing me up a tax bracket and/or increasing taxes on SS? If I DON'T...
by kaneohe
Sun Jan 25, 2015 5:57 pm
 
Forum: Investing - Help with Personal Investments
Topic: Some RMD Questions
Replies: 28
Views: 1500

Re: Long term cap gains tax rate for 15% bracket

Would you kindly share w/ us which words in Ch. 16 you consider misleading? Table 16-1. It says: IF your net capital gain is from ... other gain1 and the regular tax rate that would apply is 10% or 15%, THEN your maximum capital gain rate is ... 0%. But it is not 0%. Some of it may be 0%, but some ...
by kaneohe
Sun Jan 25, 2015 5:41 pm
 
Forum: Investing - Help with Personal Investments
Topic: Long term cap gains tax rate for 15% bracket
Replies: 17
Views: 1716

Re: Long term cap gains tax rate for 15% bracket

Would you kindly share w/ us which words in Ch. 16 you consider misleading? The QDIV/LTCG worksheet considers your taxable income (including the QDIV/LTCG) as defining your tax bracket for the purposes of determining your tax rate on those QDIV/LTCG. If you assume something else as is not uncommon,t...
by kaneohe
Sun Jan 25, 2015 5:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Long term cap gains tax rate for 15% bracket
Replies: 17
Views: 1716

Re: Roth to Traditional and then backdoor to Roth

You aren't being taxed twice. Basically you made a 2013 non-deductible TIRA contribution. Then you converted it in2014. You then made a 2014 non-deductible TIRA contribution and converted that in 2014. Your 2013 8606 should show basis for the first contribution. Your 2014 8606 should add the basis o...
by kaneohe
Sun Jan 25, 2015 3:20 pm
 
Forum: Personal Finance (Not Investing)
Topic: Roth to Traditional and then backdoor to Roth
Replies: 9
Views: 799

Re: $1 and $2 foreign tax paid - file? refundable credit?

http://www.irs.gov/taxtopics/tc856.html "If you claim the credit directly on Form 1040 or Form 1040-NR without filing Form 1116, you cannot carry back or carry forward any unused foreign tax to or from this year." ***************************************************************************...
by kaneohe
Sun Jan 25, 2015 2:25 pm
 
Forum: Personal Finance (Not Investing)
Topic: $1 and $2 foreign tax paid - file? refundable credit?
Replies: 6
Views: 576

Re: Withdrawing Backdoor Conversions from Roth IRA

It was a conversion in 2010 that was taxed in 2011 and 2012 (due to the 2010 conversion allowing the one time split taxes). penalty 5 yrs for withholding pertinent details :happy (forgot about that split yr thing) We'll have to let AlanS. bail us out here.........if I had to guess, That's still a 2...
by kaneohe
Sun Jan 25, 2015 2:04 pm
 
Forum: Investing - Theory, News & General
Topic: Withdrawing Backdoor Conversions from Roth IRA
Replies: 33
Views: 2264

Re: Withdrawing Backdoor Conversions from Roth IRA

What happens if you made a total of $15,000 in contributions from 2000-2008, made a conversion of $100,600 in 2010, and then in 2015 withdrew $100,000 while under age 59.5? How do you calculate what gains are from the $100k v. the $15k, and because you made contributions and the 5-year conversion r...
by kaneohe
Sun Jan 25, 2015 1:47 pm
 
Forum: Investing - Theory, News & General
Topic: Withdrawing Backdoor Conversions from Roth IRA
Replies: 33
Views: 2264

Re: Preparing for RMDs

If all the conditions are met then you may be able to claim your parents as dependents on your taxes and in addition to getting the extra exemption you might be able to deduct their medical expenses that you pay. That would be worth researching and planning for that possibility since you might need...
by kaneohe
Sun Jan 25, 2015 12:22 pm
 
Forum: Investing - Help with Personal Investments
Topic: Preparing for RMDs
Replies: 60
Views: 4068

Re: $1 and $2 foreign tax paid - file? refundable credit?

I just read a TT article that the credits listed in the "Taxes & Credits" section of the 1040 pg2 (upper section) are non-refundable credits so don't bother.
You can only use them against tax liabilities so if there are none.............
by kaneohe
Sun Jan 25, 2015 12:11 pm
 
Forum: Personal Finance (Not Investing)
Topic: $1 and $2 foreign tax paid - file? refundable credit?
Replies: 6
Views: 576

Re: Withdrawing Backdoor Money from Roth IRA

......................................... Ibtw ....have you read this http://fairmark.com/retirement/roth-accounts/roth-conversions/isolating-basis-for-roth-conversion/ Sounds like for the mega, you can send the non-taxable part to the Roth and the taxable part to TIRA and not pay taxes. The plot a...
by kaneohe
Sun Jan 25, 2015 9:45 am
 
Forum: Investing - Theory, News & General
Topic: Withdrawing Backdoor Conversions from Roth IRA
Replies: 33
Views: 2264

Re: HSA... any receipt savers?

I think it is directly applicable to the scenario I proposed. If i leave my $20K in my account, then it is mathematically equivalent to either the Roth column and/or the Nondeductible IRA column. If i take my $20K out, then it is equivalent to the Taxable column. Why the Nondeductible IRA? That sug...
by kaneohe
Sat Jan 24, 2015 9:29 pm
 
Forum: Investing - Help with Personal Investments
Topic: HSA... any receipt savers?
Replies: 175
Views: 7515

Re: HSA... any receipt savers?

To give a little Quantitative analysis to this see. http://www.bogleheads.org/wiki/Non-deductible_traditional_IRA#What_kind_of_investments_are_well_suited_to_a_non-deductible_traditional_IRA.3F That is a good spreadsheet, but doesn't directly apply to our situation here. I think it is directly appl...
by kaneohe
Sat Jan 24, 2015 6:40 pm
 
Forum: Investing - Help with Personal Investments
Topic: HSA... any receipt savers?
Replies: 175
Views: 7515

Re: HSA... any receipt savers?

To give a little Quantitative analysis to this see. http://www.bogleheads.org/wiki/Non-deductible_traditional_IRA#What_kind_of_investments_are_well_suited_to_a_non-deductible_traditional_IRA.3F That is a good spreadsheet, but doesn't directly apply to our situation here. I think it is directly appl...
by kaneohe
Sat Jan 24, 2015 6:20 pm
 
Forum: Investing - Help with Personal Investments
Topic: HSA... any receipt savers?
Replies: 175
Views: 7515

Re: Roth IRA phase out calculator

https://www.google.com/?gws_rd=ssl#q=roth+phaseout+calculator+2014

a few here......perhaps you should input the limits for the yr you are interested in and be sure you get 100% and 0% to be sure
at least those points are correct. Perhaps some you used have another yrs limits?
by kaneohe
Sat Jan 24, 2015 1:26 pm
 
Forum: Personal Finance (Not Investing)
Topic: Roth IRA phase out calculator
Replies: 7
Views: 661

Re: Withdrawing Backdoor Money from Roth IRA

The 10% penalty is an early withdrawal penalty and never applies to the non taxable portion of any distribution. This holds true for withdrawal of conversions under 5 years. Thank you Alan S. Let me apply the ordering rules to two hypothetical situations to confirm that I correctly understand how t...
by kaneohe
Sat Jan 24, 2015 2:39 am
 
Forum: Investing - Theory, News & General
Topic: Withdrawing Backdoor Conversions from Roth IRA
Replies: 33
Views: 2264

Re: Should I sell tax inefficient mutual funds?

If you aren't doing it yet, at least turn off reinvesting the distributions and making things worse. The other part is harder.........deciding whether to sell since that usually, as you point out, involves paying more taxes on the gains. You'd have to make some calculations if selling, then starting...
by kaneohe
Fri Jan 23, 2015 8:49 am
 
Forum: Investing - Help with Personal Investments
Topic: Should I sell tax inefficient mutual funds?
Replies: 22
Views: 1464

Re: HSA... any receipt savers?

regarding the analysis on the benefit of deferring withdrawals. I have a simpler scenario: say I have $20K of receipts now (and a balance greater than that). My two alternatives are (1) leave it in HSA or (2) take it out. This should be easier to analyze the benefit. So then it is a question of is ...
by kaneohe
Thu Jan 22, 2015 8:37 pm
 
Forum: Investing - Help with Personal Investments
Topic: HSA... any receipt savers?
Replies: 175
Views: 7515

Re: LT capital gains in taxable vs retirement account

I should also mention that my MAGI disqualifies me from any tax benefit of contributing to a 403b (i.e. even contributing the maximum amount of $18,000 will not move me into a lower tax bracket). Thank you for any guidance. Contributing the max may not move you into a lower bracket but you do benef...
by kaneohe
Thu Jan 22, 2015 5:52 pm
 
Forum: Investing - Help with Personal Investments
Topic: LT capital gains in taxable vs retirement account
Replies: 8
Views: 583

Re: when did Backdoor Roth first become available?

perhpaps 2010 ? There used to be a income cap limiting Roth conversions that was removed then. http://www.schwab.com/public/schwab/nn/articles/Roth-IRA-Conversion-Look-Before-You-Leap perhaps 2014 for MegaRoth http://fairmark.com/retirement/roth-accounts/roth-conversions/isolating-basis-for-roth-con...
by kaneohe
Thu Jan 22, 2015 5:28 pm
 
Forum: Investing - Theory, News & General
Topic: when did Backdoor Roth first become available?
Replies: 6
Views: 997

Re: Help on Converting Traditional IRA into Roth IRA

You don't happen to have any other TIRAs lurking around by any chance?????
by kaneohe
Thu Jan 22, 2015 4:25 pm
 
Forum: Investing - Help with Personal Investments
Topic: Help on Converting Traditional IRA into Roth IRA
Replies: 10
Views: 433

Re: AMT............Total Tax Same w/ Std. Deduction/Itemize

Then why are you paying AMT? Take a look at your Form 6251 and see which other deductions you are losing, and to make sure that your tax software filled out the forms correctly. CA state taxes are high, but it's rare for state taxes alone to cause you to pay AMT, unless you paid an unusually large ...
by kaneohe
Thu Jan 22, 2015 11:55 am
 
Forum: Personal Finance (Not Investing)
Topic: AMT............Total Tax Same w/ Std. Deduction/Itemize
Replies: 11
Views: 1159

Re: HSA... any receipt savers?

We were only able to participate in contributing to an HSA for a few years, due to starting date limited by when employer started providing this option. At this point (retired and no longer contributing to our HSA but with a current balance of <$10k), our plan is to keep the HSA $$ in a Vanguard fu...
by kaneohe
Thu Jan 22, 2015 11:20 am
 
Forum: Investing - Help with Personal Investments
Topic: HSA... any receipt savers?
Replies: 175
Views: 7515

Re: HSA... any receipt savers?

From Pub 969 http://www.irs.gov/pub/irs-pdf/p969.pdf ... "The medical expenses had not been taken as an itemized deduction in any year."... If I intend to keep receipts for longer than 7 years (and I do), I should probably keep tax records too ... :/ Medical expenses can only be deducted ...
by kaneohe
Thu Jan 22, 2015 11:08 am
 
Forum: Investing - Help with Personal Investments
Topic: HSA... any receipt savers?
Replies: 175
Views: 7515

Re: HSA... any receipt savers?

According to my CPA, you cannot itemize medical expenses if you have HSA funds available. Doesn't sound quite right, but it's not important to me. L. IRS typically frowns on double-dipping. You cannot use the same expenses to itemize medical expenses and justify HSA reimbursements. You can itemize ...
by kaneohe
Thu Jan 22, 2015 10:49 am
 
Forum: Investing - Help with Personal Investments
Topic: HSA... any receipt savers?
Replies: 175
Views: 7515

Re: IRA to Roth Conversion + Tax Implications

You can opt out of withholding from TIRA so the whole amount goes to conversion and no early withdrawal penalty will result.
You may have to increase withholding on salary or other income streams or pay estimated taxes from taxable accounts to prevent
underpayment penalties at tax time.
by kaneohe
Thu Jan 22, 2015 10:12 am
 
Forum: Investing - Help with Personal Investments
Topic: IRA to Roth Conversion + Tax Implications
Replies: 7
Views: 658

Re: HSA... any receipt savers?

Assume a hypothetical and this hypothetical is very representative of my current situation. I max out my HSA and will never need it. I have inferred that I do not need to ever save tax receipts; I could either 1) use the money for some unforeseen expenses medical when elderly and be able to withdra...
by kaneohe
Thu Jan 22, 2015 9:38 am
 
Forum: Investing - Help with Personal Investments
Topic: HSA... any receipt savers?
Replies: 175
Views: 7515
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